BurmaNet News, October 28, 2004

[Editor]

October 28, 2004, Issue # 2589

INSIDE BURMA
AFP: Merchants from US, Britain to attend gem sale in sanction-hit Myanmar
FEER: Burma in the dark
Bangkok Post: Aid to Rangoon to be affected

BUSINESS / MONEY
Xinhua News Agency: Tourist arrivals in Myanmar up in first half of 2004-05

REGIONAL
Xinhua News Agency: China's Xiaowan hydroelectric power station succeeds
in damming river
Irrawaddy: India’s Burma policy tempered by pragmatism
SinoCast: China Telecom to Build Information Superhighway in GMS

INTERNATIONAL
AP: European Union urges Asia to pressure Myanmar

OPINION OTHER
STATEMENT: United States Senator Mitch McConnell on Burma and India
Jakarta Post: Political tension, confusion in Myanmar

______________________________________
INSIDE BURMA

October 28, Agence France Presse
Merchants from US, Britain to attend gem sale in sanction-hit Myanmar

Merchants from the United States and Britain will join hundreds of their
colleagues from around the world here Sunday as Myanmar's sanctions-hit
regime puts millions of dollars worth of gems on sale.

More than 500 merchants from nine nations are expected to attend the sale
as the military junta tries to cut the smuggling of precious stones from
their country and bring the trade firmly under government control.

At least 2,000 lots of jade, gems and pearls will be sold by tender and
competitive bidding during the four-day event, said U Myint Thein, deputy
mines minister.

The largest number of dealers are from Hong Kong and mainland China, he said.

More local producers are opting to sell their gems through the official
emporia which are now held three times annually, said Khin Win, managing
director of the state-owned Myanmar Gems Enterprise which sponsors the
events.

"They are finding out that it is more expedient for them to channel their
products through us ... They not only earn more foreign currency but can
also use their earnings to import machinery and other essentials," he told
AFP.

Despite the official sales, most stones are smuggled out of the country,
depriving the poverty-hit and politically isolated country of much-needed
foreign revenues.

The junta has been hit by international sanctions, particularly by the
United States and the European Union, over the ongoing detention of
opposition leader Aung San Suu Kyi, whose political party won elections in
1990 but has never been allowed to rule.
Myanmar's gem market has so far been unable to compete with those of
Thailand and Hong Kong, where the bulk of the smuggled wares end up.

____________________________________

November 4, Far Eastern Economic Review
Burma: In the dark--The world waits to see whether a top leadership change
will affect democracy and reconciliation

Gen. Maung Aye appears to be the big winner from Burma's recent leadership
changes, but analysts cannot agree on whether or not the army chief's
victory over long-time rival Gen. Khin Nyunt will lead to policy changes.
Some believe Khin Nyunt's tentative steps toward democracy and national
reconciliation will be now be abandoned, while others think that Maung Aye
could belie his "hardliner" tag and take these processes further. Still
others reckon that the power struggle is about economics and personality
rather than ideology, and that when the dust settles there will be very
little real change.

The military government in Rangoon announced on October 19 that
military-intelligence chief Khin Nyunt had been removed as prime minister
and "permitted to retire for health reasons." The New Light of Myanmar
newspaper on October 25 quoted senior junta member Gen. Thura Shwe Mann as
saying Khin Nyunt, who is reportedly under house arrest, was guilty of
insubordination and involvement in "bribery and corrupt practices." That
raises the prospect of his trial.

Khin Nyunt's once powerful intelligence apparatus, which used to function
like a state within a state, has been brought under tighter military
control and has lost its virtual autonomy. Hundreds of intelligence
officers are also reported to have been arrested.

As prime minister, Khin Nyunt was ostensibly in charge of the democratic
process and had been pushing a seven-point road map to democracy,
including forging a new constitution and eventually holding a general
election. He was, as a result, seen by many overseas as a relative
moderate compared to "hardliners" Maung Aye and junta chief Gen. Than
Shwe. Khin Nyunt is also credited with forging peace deals between the
government and most of the country's ethnic-minority insurgents.

Khin Nyunt's successor, Lt.-Gen. Soe Win, is also tarred overseas as a
hardliner. In Washington, State Department spokesman Richard Boucher
claimed on October 21 that Soe Win was "directly involved in the decision
to carry out the brutal attack on Aung San Suu Kyi on May 30, 2003," in
which up to 70 people are said to have died and which led to Suu Kyi's
current house arrest.

But with Khin Nyunt out of the way, these tags might not be so useful or
relevant. In public, the secretive government has vowed to continue
pushing for democracy and national reconciliation. The analysts don't know
whether to believe this or not.

Some diplomats, for instance, say that Maung Aye was unhappy at the deals
struck with ethnic minorities as they have created large, virtually
autonomous regions in Burma's sensitive periphery. They fear he might seek
to change them. Yet, according to an intelligence official in northern
Thailand, soon after Khin Nyunt's removal the army head sent one of his
top officers, Lt.-Gen. Thein Sein, to the northern Burmese town of Lashio
to assure the United Wa State Army that their ceasefire agreement with the
government would be honoured. The UWSA is the largest ethnic-minority
armed force to sign a peace deal with the junta.

The analysts differ, too, over how the leadership changes will affect the
democratic process. Many, including several regional and international
media organizations, believe that a moderate voice has been removed from
the Burmese leadership and that will mean a step backward for democracy.

Others speculate that, with his rival out of the way, Maung Aye will take
on Khin Nyunt's mantle and reopen a dialogue with Suu Kyi. "Maung Aye
needs to restore Burma's standing in the international community -- and he
can, therefore, take some unexpected steps," says a Western intelligence
officer, who also points out that the general has the clout to do so as
"he has the army behind him."

Others are convinced that there will be no policy changes and they say the
military brass bust-up was never a fight between hardliners and
pragmatists. "The main reason why the spook chief and the army commander
dislike each other with some intensity is that they distrusted each other.
Khin Nyunt's most important responsibility was compiling dossiers of the
activities of other members of the ruling circle," says Bruce Hawke, a
Thailand-based Burma watcher.

Khin Nyunt and his intelligence network also controlled access to large
amounts of money from cross-border trade and domestic businesses at a time
when the government faces trade and aid embargoes with much of the world.
This is also seen as a source of friction, and the military has taken over
scores of businesses controlled by Khin Nyunt and his associates.

____________________________________

October 28, The Bangkok Post
Aid to Rangoon to be affected

The recent political manoeuvrings will definitely take a toll on
international aid for Burma at the regional economic scheme to be held in
Krabi next week, a Foreign Ministry source said.

The Burmese government should realise all international assistance could
be affected except that involving human resource development, the source
said.

Aid to Burma and other new members of the Association of Southeast Asian
Nations (Asean) will be top of the agenda in the two-day talks beginning
on Monday on the Ayeyawady (Irrawaddy)-Chao Phraya-Mekong Economic
Cooperation Strategy. Foreign ministers from Thailand, Burma, Laos,
Cambodia and Vietnam will meet with representatives from potential donors
including Australia, France, Japan, New Zealand and the Asian Development
Bank at the meeting.

Due to the political change in Burma last week which saw Khin Nyunt
removed as prime minister, Rangoon will send Deputy Foreign Minister Kyaw
Thu to the meeting, the source said.

"Burma has to wait until the situation in the country improves" so that
other assistance will be channelled to the country, the source added.

Burma's state media announced a change of prime minister on Oct 19 from
Gen Khin Nyunt to Lt-Gen Soe Win.

Formerly known as the Economic Cooperation Strategy, the Thai-initiated
sub-regional cooperation was launched in April last year to bring in more
Asean nations.

Its focus is on trade and investment facilitation, agricultural and
industrial cooperation, transport links, tourism cooperation and human
resource development.

____________________________________
BUSINESS/MONEY

October 28, Xinhua News Agency
Tourist arrivals in Myanmar up in first half of 2004-05

Tourist arrivals in Myanmar rose over 20 percent to 315,823 in the first
half (April-September) of the present fiscal year 2004-05 compared with
the same period of the previous year, the local news journal Myanmar Times
reported in this week's issue.

These foreign visitors entered the country at Yangon, Mandalay and Bagan
international airports with 97,736 coming in through Yangon entry point
alone, the Ministry of Hotels and Tourism was quoted as saying.

Independent travelers took nearly 48 percent, while package tourists
accounted for 11.7 percent, business travelers 21 percent and the rest
went to other categories, it said.

The increase of tourist arrivals during the six-month period was
attributed to the rise in the number of visitors from neighboring
Thailand, the sources added.

More tourists are expected to arrive by the open season starting November.

According to the figures of the Central Statistical Organization, tourist
arrivals in Myanmar stood 330,144 in 2003-04, of which 122,940 entered at
airports, while 145,071 at border points.

Meanwhile, Myanmar has also launched tourism promotional campaigns in some
Asian nations including Japan, Singapore, Malaysia and India.

Myanmar so far has 570 hotels with more than 17,200 rooms involving an
investment of about 583 million US dollars plus 33 billion kyats (about
41.2 million dollars), according to official statistics.

Contracted foreign investment in the sector of hotels and tourism has so
far amounted to 1.06 billion dollars since Myanmar started to open to such
investment in late 1988.

_____________________________________
REGIONAL

October 28, Xinhua News Agency
China's Xiaowan hydroelectric power station succeeds in damming river

China's top project for western development, the Xiaowan Hydroelectric
Power Station, has dammed the Lancang River a year ahead of schedule after
three years of all-out, arduous efforts.

The hydropower station, second in size in China only to the Three Gorges
Power Project, then announced to start the construction of a
292-meter-high, concrete hyperbolic arch dam, the highest of the world.

The Xiaowan Hydroelectric Power Station is an essential part of China's
strategy of transmitting electricity from resources- abundant western
areas to power-short Shanghai Municipality, Guangdong, Jiangsu and other
eastern provinces.

The hydropower station is being built on the middle reaches of the
turbulent Lancang River, the fifth longest in China. Xiaowan Station,
whose construction began in early 2002, will have six generating units
with a designed capacity of 4.2 million kilowatts.

The cost of the Xiaowan hydropower station is estimated at 32 billion yuan
(nearly 3.9 billion US dollars), the largest sum spent on a project of
this kind in Yunnan province in the past 50 years.

The first generating unit of the project is expected to go into operation
in late 2010, and the last one will be finished three years later. By
then, its annual power output will be 18.9 billion kwh, half of which will
be sent to Guangdong and other provinces in coastal areas.

The major feature of the hydropower station is a concrete hyperbolic arch
dam that towers 292 meters high, which is equivalent to the height of a
100-story skyscraper.

The dam, believed to be the highest dam on earth, will form a reservoir
with a storage capacity of 15 billion cubic meters after it is completed.
This is equal to the combined amount of all reservoirs in Yunnan. The
hydropower station will also perform other functions such as flood
control, irrigation, sand retention and navigation.

As the construction of Xiaowan station faces many knotty technical
problems, China launched cooperation schemes with prestigious experts from
the United States, Norway, Russia and France during the construction
process.

China's hydroelectric experts said the establishment of the Xiaowan
station would turn the international Lancang-Mekong River into a "golden
watercourse" and benefit all countries along the river.

Lancang River, which rises in the Tanggula Mountains on the Qinghai-Tibet
Plateau, flows for a total of 4,500 kilometers from Tibet to Xishuang
Banna in Yunnan Province, joins the Mekong River, and then flows into
Laos, Myanmar, Thailand, Vietnam and other countries.

Currently, China is building six hydroelectric hydropower stations on the
middle and lower reaches of the Lancang River in addition to the Manwan
and Dachaoshan hydropower stations. The combined installed capacity of the
eight power stations will amount to 15.55 million kw, upon their
completion.

_____________________________________

October 28, Irrawaddy
India’s Burma policy tempered by pragmatism

Burma’s military junta may be anathema to supporters of democracy but
India believes that the generals hold the key to development of its
troubled northeast and for vigorous bilateral trade.

“India, in fact no country in the region, can afford to wait for democracy
to happen to Burma,” said Gangantah Jha, security expert and professor of
international studies at the Jawahahralal Nehru University.

On Monday, the neighbors signed a slew of cooperation agreements with nary
a mention that visiting Sr-Gen Than Shwe had only a week ago purged his
government of prime minister Gen Khin Nyunt which drew yet another round
of international opprobrium.

The removal of Khin Nyunt, who was also military intelligence chief,
appeared to end a long struggle between his so-called moderates and an
army faction uninterested in negotiating political reconciliation between
the junta and the pro-democracy opposition.

Than Shwe, with eight of his cabinet ministers in tow, landed in the
Indian capital on Sunday  to a red carpet welcome befitting the first
visit by a Burmese head of state in 24 years and one that would last eight
days.

That was a quarter of century too long for analysts and leaders in India
who have quietly steered a revamping of India’s policy towards its
neighbors from a somewhat preachy and moralistic one advocating democratic
values to one that takes in hard realities—both domestic and external.

For example, when Pakistan President Gen Pervez Musharraf took over in a
military coup five years ago New Delhi refused to deal with a “military
dictator” but within the space of two years got around to inviting him
over for a summit, as realization dawned that the army was a fairly
permanent feature of India’s biggest neighbor.

According to Jha the situation is not much different with  Burma—India’s
other large neighbor and one with a 1,700-km long common border stretching
through the insurgency-hit northeastern states of Nagaland, Mizoram,
Manipur, Tripura and Arunchal Pradesh.
“Anybody can see that democracy is not going to return to Burma in a hurry
because the army has systematically undermined its pillars and whenever
democracy returns the army is sure to retain an overbearing influence,”
Jha said.

Meanwhile, India is grateful that Rangoon has done its bit by encouraging
Naga insurgents, especially the well-armed National Socialist Council of
Nagaland led by Isak Chisi Swu and Thuingaleng Muivah, or the NSCN-IM, to
get to the negotiating table.

Part of that cooperation, ironically running through the years when India
vocally supported a quick return to democracy in Burma, may have been due
to the fact that the Naga tribes are a threat to both countries.

As recently as in 1998 the NSCN described the Nagas to the UN Commission
on Human Rights in Geneva as a nation of three million people occupying
100,000 square kilometers of land that is “under occupation by Indian and
Burmese forces.”

Such declarations at international fora have resulted in New Delhi seeking
better cooperation with Rangoon while intensifying negotiations for a
peaceful settlement painstakingly pursued over decades with exiled Naga
leaders—Muivah and Isak—in foreign capitals.

The latest round of talks held in the Thai capital of Bangkok earlier this
month resulted in Muivah announcing on October 22 that the NSCN top
leadership was now ready to return to India with a view to putting an end
to three decades of armed insurgency aimed at the formation of a
independent “Nagalim” that would include parts of Burma and of Indian
states like Manipur, Arunachal Pradesh and Assam—all with Naga
populations.

While New Delhi’s success is leveraging peace with Naga insurgents, Burma,
on the other hand, is trying to convince neighboring governments that
denying sanctuary to the armed militant groups could be mutually
beneficial to all countries in the region.

Apart from insurgency, New Delhi has in recent years started to worry
about another cross-border menace in its porous northeast—the trafficking
of drugs particularly amphetamine and other “synthetic” drugs across the
border for onward movement to the port city of Kolkatt and beyond.

Soon after Thai Prime Minister Thaksin Shinawatra announced his “war
against drugs” in February last year, reports started emerging that mobile
heroin laboratories were being shifted to the Indian side of Burma from
the Thai-Burma border.

Thus a Memorandum of Understanding on “cooperation in non-traditional
security issues” signed on Monday between India and Burma, along with
other agreements, has strong clauses to counter drug trafficking and
provides for training and exchange of personnel to fight the cross-border
problem.

“There is now clear assurance that the territory of Myanmar [Burma] will
not be allowed to be used by groups inimical to India,” said a government
spokesman.

On democracy, India’s Prime Minister Manmohan Singh, said the spokesman,
extended support for any such moves in Burma including plans for a new
constitution, but agreed that such a transition was a complex process.

Open support in India for a return to democracy in Burma and its
incarcerated opposition leader, the Nobel Peace laureate Aung San Suu Kyi,
is now confined to Burmese exile groups supported by George Fernandes,
India’s outspoken former defense minister.

Fernandes helped organize a three-day “International Convention for the
Restoration of Democracy in Myanmar” a week before Than Shwe’s arrival
defying suggestions that the meeting be postponed till after the departure
of the general.

But Fernandes admitted at a press conference that he failed to do anything
to further the cause of democracy in Burma during his six years as defense
minister that ended when the coalition government led by the Bharatiya
Janata Party was voted out of power in May.

The new government led by the Congress party, which demanded the release
of Suu Kyi while in the opposition, denied a visa to Sein Win, the
Washington-based prime minister of Burma’s government-in-exile, so that he
could not attend Fernandes’ pro-democracy convention.

In a message read out to the conference, Sein Win said while he did not
expect India to be “unilaterally championing” the cause of democracy in
Burma he wanted to see the country “join other democracies in brining
about a United Nations facilitated peaceful change.”

But evidently India seems to have deviated from that line of thought and
analysts like Jha think that short of military intervention, which would
almost certainly be vetoed by China in the UN Security Council, such a
democratic change imposed from outside still remains elusive.

“Even economic sanctions are not going to work against Burma because the
military rulers in Yangon [Rangoon] have close ties with China,” said Jha.

Indeed India’s change of heart after a bout of vocal support for Suu Kyi 
between 1988 and 1990 was partly a reaction to China rapidly moving in to
fill the spaces it had vacated.

“India is serious about pursuing closer economic ties with its eastern
neighbors through BIMSTEC [the Bangladesh, India, Myanmar, Sri Lanka and
Thailand Economic Cooperation] which had its first summit in July and is
only too aware that Myanmar is the bridge to the new grouping,” Jha said.

_____________________________________

October 28, SinoCast
China Telecom to Build Information Superhighway in GMS

At the GMS (Great Mekong Subregion) information superhighway conference
held in Kunming, Yunnan Province, China Telecom signed a preliminary
agreement about building an unified information superhighway platform in
GMS with its counterparts in Burma, Thailand, Laos, Cambodia, and Vietnam.

According to the agreement, the largest fixed-line telecom carrier in
China will firstly build a complete telecom infrastructure network
covering countries along GMS, and then develop a variety of telecom
businesses in accordance with economic development state in the region.

A top executive of China Telecom said in an interview that the company was
now in talks with telecom carriers in these five countries, expecting to
strike a common agreement concerning how to connect their optical fiber
cables together as early as possible.

As a matter of fact, China Telecom showed willingness for the project from
the very beginning.

As early as last year, Li Xinhua, vice governor of Yunnan Province,
promised Zhang Jiping, vice general manager of China Telecom, that Yunnan
provincial government would actively support China Telecom to build Yunnan
into an information communication hub and economic information platform
between China and Southeast Asian countries. China Telecom will extend its
optical fiber cable to boundaries with Burma, Laos, and Vietnam, waiting
to connect with cables in these countries.

However, critics remarked that China Telecom launched the move for the
political purpose, rather than economic purpose. Most countries along GMS
are less developed, and it is of no real significance to build a so-called
information superhighway there, let alone making profits in short term.

To spur the economic development in the region, Asian Development Bank
once planned to set up a set of international optical fiber cable systems
there, including 13 backbone transmission lines and a inter-connection
line, which would link Cambodia, Laos, Burma, Vietnam, Thailand, and
Yunnan China.

But because of the unbalanced economic development in these countries, the
implementation of the project was completely dependent on capitals from
Asian Development Bank. Before China Telecom put forward the plan to build
a complete telecom infrastructure network there, Asian Development Bank
just finished a small part of the project.

Nevertheless, China Telecom holds a completely different viewpoint.
Although countries along GMS can not compare with China in terms of
economic development, their GDPs (Gross Domestic Products) has increased
to 5% to 6% in recent years. In addition, telecom infrastructure markets
in these countries are just in the infancy, and this is a big opportunity
for China Telecom. With the gradual development of economic relationship
between China and these countries, demands for trans-regional telecom
services will rise definitely.

Lei Zhenzhou, a director from China's Ministry of Information Industry,
said that the establishment of a telecom network along GMS was not to
respond to Chinese government's "anti-poverty project", but set up a
commercial telecom platform. Network construction parties involved in the
project will share costs of the project afoot in proportion to the number
of networks they possess.

According to the previous negotiation result, China Telecom will be mainly
in charge of connecting independent telecom networks in these countries,
forming a complete infrastructure network. In light of network
distributions, these countries will assume construction expenditures by
themselves. If some countries can not afford the expenditures, Asian
Development Bank will extend loans with low interest rate to them.

China Telecom stressed that it was only to link its networks with these in
other countries. But some insiders noted that due to political
disturbances, some countries such as Laos and Cambodia had no money to
build optical fiber networks at all, and in this way, China Telecom could
tap into these countries' telecom market which had not been developed.

_____________________________________
INTERNATIONAL

October 28, Associated Press
European Union urges Asia to pressure Myanmar

Indonesia--The European Union on Thursday urged Asian nations to pressure
Myanmar to enact democratic reforms put in doubt by the sacking of a
moderate prime minister and the continued detention of pro-democracy
leader Aung San Suu Kyi.

Since the ouster of Prime Minister Gen. Khin Nyunt earlier this month, top
junta leader Lt. Gen. Thein Sein has promised that the government will
reconvene a national convention to draft a new constitution in early 2005
-- the first step in a seven-point plan that is supposed to lead to
elections in the military-ruled country.

Nevertheless, the EU will maintain penalties against Myanmar, said Bernard
Bot, president of the EU Council of Ministers.

"We will continue the sanction regime and continue to ask our Asian
partners to be helpful in convincing the government in (Myanmar) to mend
its ways, release Aung Sang Suu Kyi and allow her party to participate in
the congress taking place at the moment," Bot, who also is the Dutch
foreign minister, said after meeting his Indonesian counterpart, Hassan
Wirajuda.

Suu Kyi's National League for Democracy is boycotting the national
convention because the government refuses to release Suu Kyi from house
arrest. The Nobel Peace Prize laureate has been in detention since May
last year, when the military cracked down on her party after a violent
clash between her followers and government supporters.

"EU policy is one of keeping up the pressure and we hope we will get
support from our Asian partners," he said.

Wirajuda did not comment on Myanmar during a joint news conference.

Myanmar, also known as Burma, has been ruled by the military since 1962.
The current junta called elections in 1990, but refused to hand over power
when Suu Kyi's party won a landslide victory.

A power shuffle earlier this month replaced the relatively moderate Khin
Nyunt with hardline Lt. Gen. Soe Win -- a move seen as a blow to prospects
for reforms and for the release of Suu Kyi.

Earlier this week, some regional lawmakers said they may ask that Myanmar
be suspended from the 10-member Association of Southeast Asian Nations if
it does not speed up democratic reforms.
_____________________________________
OPINION / OTHER

STATEMENT

October 27, Senator Mitch McConnell
Burma and India

"It is absolutely appalling that the world's largest democracy is
embracing one of the world's most repressive and illegitimate military
juntas.  The community of democracies should expect more from one of its
members.

"The short-term gains from Than Shwe's visit serve only the interests of
the thugs in Rangoon - and not the people of Burma.  The timing of this
trip, coming in the wake of a power play within the illegitimate State
Peace and Development Council, sends the wrong message at the wrong time.

"I hope it is not lost on India's leadership that their long-term
interests are best served by a Burma rooted in democracy, freedom and
justice.  India has served as an exemplar for nonviolence and should do
more for those Burmese who continue to courageously and nonviolently
struggle for democracy."

_____________________________________

October 28, Jakarta Post
Political tension, confusion in Myanmar - Soe Myint

New Delhi: Myanmar's powerful military intelligence chief and Prime
Minister Gen. Khin Nyunt who was fired last Tuesday by the ruling military
regime, the State Peace and Development Council (SPDC), has been accused
of corruption by the new foreign minister Nyan Win.

The earlier official announcement , signed by Senior General Than Shwe,
head of the SPDC who is to visit India next week, said that Khin Nyunt was
"permitted to retire" for "health reasons".

The latest political shake up within the military junta came a few days
after the arrest of about two hundred officers in Muse town on the
China-Myanmar border, who were under Khin Nyunt's command, on charges of
corruption and gold smuggling.

With the removal of Khin Nyunt from the military establishment, the
long-standing power struggle within the Burmese military hierarchy between
Than Shwe and his deputy Maung Aye on one side and the so-called
"moderate" Khin Nyunt has ended.

The question remains however is whether the two top leaders of SPDC can
handle the most serious challenge that the regime has faced since it came
to power in 1988.

Gen. Khin Nyunt is believed to have been at least willing to talk with the
opposition democratic forces and Aung San Suu Kyi, leader of the National
League for Democracy (NLD) while the hardliners in the military regime
like Senior General Than Shwe and General Maung Aye do not bother about
any such "political dialogue".

Sources in Rangoon said Khin Nyunt, 64, has been under house arrest since
last Tuesday and his son, Ye Naing Win, the owner of Myanmar's sole
internet service provider, Bagan Cybertech and other properties such as CP
Livestock is also under detention.

The politics surrounding the dramatic removal of Khin Nyunt is underlined
by the selection of his replacement, Lt. Gen. Soe Win. Soe Win is accused
of masterminding the May 30 "Depayin Massacre" last year, in which at
least 70 supporters of Aung San Suu Kyi were killed by the military-backed
thugs in upper Myanmar. Aung San Suu Kyi and her deputy U Tin Oo have been
under house arrest since then.

The first military coup in Myanmar, then Burma, took place in 1962 when
Gen. U Ne Win and a group of military officers ousted Premier U Nu, a
friend of Jawaharlal Nehru, and since have ruled the country with
ruthlessness.

The economy has sunk to levels verging on bankruptcy and, in 1987, the
United Nations has conferred its "least-developed nation" status on what
was once South East Asia's rice-bowl nation.

With an army of over 400,000 soldiers, the military controls every aspect
of life including business. There has been infighting and conflicts
between the generals for their business and power interests.

There are two specific challenging issues before the present leadership.
The National Convention, which was a part of so-called Khin Nyunt's "Road
Map to Democracy", when he became Prime Minister in August 2003, is in
recess. The military regime will find difficulties in resuming the
Convention in the near future.

Another challenging issue is the ethnic armed organizations, which have
fought a civil war for more than four decades with Yangon. Khin Nyunt was
the main architect of these cease-fires and the junta says it is in
cease-fire with 17 armed organizations.

Khin Nyunt had taken personal initiatives to get these armed organizations
into a legal framework and with his disappearance, the future of
cease-fire agreements between the junta and the armed groups has become
uncertain.

More importantly, with the recent changes in high-level positions of the
regime (the regime now has new faces including the Prime Minister, the
Foreign Minister, the deputy Foreign Minister), Myanmar's chances for
democratization and return to a civilian rule are bleaker than before.

At present, there is no one to challenge Senior General Than Shwe within
the military and he does not even allow his colleagues to mention the name
of Suu Kyi at cabinet meetings. And India will roll out red-carpet welcome
for him on Oct. 25 in New Delhi.

The writer is a Myanmarese exile and journalist.